By Dan Steinhart, Casey Research US corporations are sitting on more cash than at any point since World War 2. That's without including banks. I'm only talking about non-financial corporations – the ones that sell goods and services and make the economy go. Those businesses hold $1.4 trillion. In absolute terms, that's the most ever. In relative terms, it's the most since World War II. As investors, we can infer quite a bit from corporations' inability (or unwillingness) to deploy their cash. For one, it indicates that business have assumed a very defensive stance. Cash, of course, is a buffer against uncertainty - the uncertainty that business slows for any reason. … [Read more...]
What is the Difference Between Micro and Macro Economics?
Microeconomics vs. Macroeconomics- Economics can be described as the social science that examines how people use limited resources to produce, distribute, and consume goods and services to satisfy their unlimited needs and desires. Although microeconomics and macroeconomics are not the only disciplines and paths of specialization to exist within the broader context of economics, these two related, tightly bound, but nonetheless disparate fields are likely the most prominent. Microeconomics and macroeconomics do exactly what their names indicate. Microeconomics focuses on close-up snapshots of people, businesses, and non-profit organizations acting within economies while macroeconomics … [Read more...]
What is the Real Purpose of the Federal Reserve?
The Federal Reserve- Is the Federal Reserve really doing such a bad job… or does it actually do exactly what it's supposed to do, but the average American is in the dark about what that is? The Federal Reserve is merely a "Cartel" of Bankers whose primary purpose is to promote their own interests and not the interests of the American public. "They create money out of nothing, move it around a bit and then collect interest on it." If your or I tried to do that we'd be arrested. “The Fed’s sole purpose: keeping the banks afloat” – G. Edward Griffin In this explosive video, Casey Summit speaker G. Edward Griffin, author of The Creature from Jekyll Island, talks about the Fed's real role … [Read more...]
Civil Liberties Rest Upon Sound Money
Sound Money = Freedom Over the years I have written many times about the necessity of sound money to base our economy on and the results of wanton reckless money creation that will alway result in inflation and a worthless currency either sooner or later. I've told you about how inflation affects you, and how the Money Supply affects Inflation and Who Inflation Hurts the Most. I also spoken at length about the value of gold as the Timeless Inflation Hedge and how Gold is Still Money. Today, Wendy McElroy, author of The Art of Being Free shares a deep and fascinating research on all the main issues we face: the loss of security in the name of security, the state's role in strangling … [Read more...]
Be Prepared If – Inflation Gets Out of Hand
By Jeff Clark, Casey Research The cheek of it! They raised the price of my favorite ice cream. Actually, they didn't increase the price; they reduced the container size. I can now only get three servings for the same amount of money that used to give me four, so I'm buying ice cream more often. Raising prices is one thing. I understand raw-ingredient price rises will be passed on. But underhandedly reducing the amount they give you… that's another thing entirely. It just doesn't feel… honest. You've noticed, I'm sure, how much gasoline is going up. Food costs too are edging up. My kids' college expenses, up. Car prices, insurance premiums, household items – a list … [Read more...]
Will Greece Follow Iceland or Weimar Germany?
In Iceland the bankers were told to stuff it. In Weimar Germany they resorted to the printing press. Which model will modern day Greece follow?It seems that the words Weimar Germany and Hyperinflation are almost synonymous. The Weimar Republic (Das Weimarer Republik in German) is the name of the democratic government which was established in 1919 when Germany was defeated in WWI and Emperor Wilhelm II abdicated the throne. The problem came from the War repairations that were foisted upon Germany by the winners and the growing internal unrest which was allowing the Nazi's to gain a foothold. In an effort to pay their debts, promote full employment, and fight back against growing competitive … [Read more...]
What is the Significance of the Fiat Currency?
Last month in an article entitled What Is Fiat Currency? we told you that "Fiat currency is a term that is used to describe a currency which is created by “fiat” or “arbitrary order or decree” of the government." This month we would like to talk a little about the significance of Fiat currency. ~ Tim McMahon, editor. Fiat Currency Currency that is declared by a government to be a legal tender is referred to as a ‘Fiat Currency’. This type of currency owes its value strictly to the government’s acceptance of it for paying taxes and requiring its acceptance for "all debts public and private". It is not backed by reserves or any physical commodity and is defined as nonconvertible paper money … [Read more...]
The Effects of Quantitative Easing
Quantitative Easing Effects- You have probably heard that the massive inflation of the money supply through Quantitative Easing is going to result in hyperinflation or at least massive inflation. But so far that hasn't happened. As a matter of fact since the end of QE2 in June of 2011 inflation rates have fallen from 3.63% in July 2011 to 1.41% in July 2012. How is that possible? The first reason is that the FED is playing a game with the banks. The FED loans money to the Banks at nearly Zero percent interest the Banks turn around and loan the money to the Government at 3% interest to finance the deficit. This gives the banks plenty of profit to shore up their sagging balance sheets. But … [Read more...]
The Biggest Commodity: The College Degree and Academic Inflation
The College Degree When we hear the term "valuable commodity" we might think about oil or gold. Yes, these are undoubtedly commodities (though their value has fluctuated over time), but many other less concrete objects are also considered commodities in our society today. A commodity is defined as "A raw material or primary agricultural product that can be bought and sold, such as copper or coffee." But the second definition is "a useful or valuable thing, such as water or time". Based on the second definition, one of the most valued commodities available in modern society is a college degree. While it may sound odd to refer to a diploma as a commodity, there's no denying that a college … [Read more...]
Should I Invest in Inflation Indexed Bonds?
The question of "Should You Invest in Inflation Indexed Bonds?" depends on your personal situation and the current inflationary environment. If you want to have a low risk investment that will keep up with inflation you might consider investing in inflation indexed bonds. Inflation Indexed Bonds When Inflation Rates are High, you might be worried about what's going to happen to your savings. Inflation series bonds are one option to consider. These unique investments have the ability to fight inflation and protect your savings from total devastation. Types of Inflation Indexed Bonds There are two different types of inflation indexed bonds issued by the U.S. Treasury one is called the … [Read more...]